CNPC to acquire Verenex in $499 million (Can.) deal

China National Petroleum Corp., eyeing the acquisition of promising new assets in Libya, has agreed to purchase Verenex Energy, Calgary, in a deal valued at $499 million (Can.) with the assumption of debt.

Eric Watkins
Oil Diplomacy Editor

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 27 -- China National Petroleum Corp., eyeing the acquisition of promising new assets in Libya, has agreed to purchase Calgary-based Verenex Energy Inc. in a deal valued at $499 million (Can.) with the assumption of debt.

Verenex's main Libyan asset lies in Areas 47 of the Ghadames basin, where the firm is the operator and holds a 50% working interest in the initial 5-year exploration period.

The Canadian firm said CNPC's offer still has to be approved by Libya's National Oil Corp. as well as Verenex shareholders owning at least two thirds of the outstanding shares.

In January, Verenex discovered oil and gas at the H1-47/02 new field wildcat (NFW) exploration well in Area 47 of the Ghadames basin. Verenex said the H1 discovery was the company's tenth in Area 47 since drilling began in September 2006.

The H1-47/02 NFW exploration well (well No. 15) was drilled 8 km north of the firm's nearest oil and gas discovery at E1-47/02 on Block 2. H1-47/02 was drilled and cased to a depth of 10,475 ft in the Memouniat formation.

Verenex said it carried out "successful extended flow tests on the H1 well from a total of 155 ft of perforations in three sandstone intervals, including a 73-ft interval in the Memouniat formation and two intervals totalling 82 ft in the Lower Acacus formation."

The tests yielded a combined maximum measured flow rate, as restricted by test equipment capability, of 1,315 b/d (gross) of light sweet crude oil and 16.2 MMcfd (gross) of gas through chokes ranging from 32/64-in. to 48/64-in.

Measured gravity of the oil ranged 42-64°, Verenex said.

Contact Eric Watkins at hippalus@yahoo.com and Uchenna Izundu at uchennai@pennwell.com.

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